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Quantum computing isn't just faster computing. It's faster computing that changes the world.
According to Gartner, 20% of global organizations will budget for quantum computing projects in 2030. In 2018, that number was just 1%.
The battle for control over that 1,900% change comes down to only a handful of companies. IonQ is one of them. And IonQ stock is going public this year.
This company is one of a handful toeing the line for the quantum computing industry. Whether or not to buy IonQ stock is a question of how well it can compete with some big names in tech.
And just like any question you might have about quantum computing, that one needs a few paragraphs…
Let's talk about whether IonQ stock is a buy or not once it's public.
What Is IonQ?
IonQ is a quantum computing company.
OK. What is quantum computing?
Quantum computing uses quantum physics to solve problems exponentially faster than any computer you know about today.
We're talking computers that can outsmart people and other computers.
It's going to bring up a lot of cybersecurity concerns, as this new artificial intelligence has the potential to crack most encryption keeping your data secure right now.
On the positive side, it would speed up processes in the finance and medical worlds, and really transform decision-making in just about any industry on the planet.
IonQ is one of the first companies focused on commercializing quantum computing hardware and software. The other companies doing that are little mom-and-pop shops like International Business Machines Corp. (NYSE: IBM), Microsoft Corp. (NASDAQ: MSFT), and Alphabet Inc. (NASDAQ: GOOGL).
You might say no one stands a chance against these bigwigs. But so far, none of them has made a commercial-grade quantum computer.
One company called D-Wave has. It boasts applications for better "airline scheduling, election modeling, quantum chemistry simulation, automotive design," and more.
But it's not a public company.
IonQ is one of the few companies that has developed a commercial quantum computing product and can also be bought on a stock exchange.
There are so many ways to go about designing and selling a commercial quantum computer – taking what otherwise might have been the size of your house and making it the size of your toaster.
Until now, most quantum computers were the size of a house. For IonQ to be successful, it has to be able to market a computer that is useable by businesses, something that will fit into an IT room.
IonQ has done this. It made a machine the size of a game console that can work at room temperature.
According to CEO Peter Chapman, it is "much smaller than the machines on the market today." Other quantum computers require "supercooling."
For its unique size and capability, it might be the first of its kind. But this is not the only thing that could separate this company's technology from the pack.
What Makes IonQ Stand Out
IonQ is both backed by all stars and has all stars working for it.
The company has tried its product by letting about 20 million software developers at Amazon Web Services and Microsoft use early versions of it.
It would make sense that the company has a relationship with Amazon. Peter Chapman is ex-director of engineering for Amazon.com Inc.'s Prime business.
Add that to the fact that IonQ has one of the earliest iterations of a tiny, scalable supercomputer, and you have a winning formula for competing in an industry set to take the world by storm.
Its particular device is set to be ready in 2023. And now, IonQ will go public ahead of the release via SPAC merger.
The special purpose acquisition company dMY Technology Group III Inc. (NYSE: DMYI) is co-headed by the former chief executive of Glu Mobile Inc. This was a company that ended up being acquired by Electronic Arts Inc. (NASDAQ: EA).
When buying a SPAC, you look for this kind of foresight and accountability in the front office. If dMY leadership could head a company that was eventually acquired by a successful gaming giant, it scores a point for the direction of IonQ, or possibly an acquisition by another tech giant in the future.
Now, we only await the deal between dMY and IonQ to be approved by the U.S. Securities and Exchange Commission.
When the deal goes through, the company will have raised $734 million in funding since 2015, including the $300 million through the merger and another $350 million in private funding from Hyundai, Breakthrough Energy Ventures, and others.
Finally, here's whether you should buy the SPAC before the merger…
Should You Buy IonQ Stock?
More than $130 billion has been poured into SPACs since the start of last year. This trend could continue moving forward, and it will likely be with emerging tech trends such as electric vehicle stocks, artificial intelligence, and now, quantum computing.
You're taking on more risk investing in a SPAC than investing in a proven stock. As with a direct listing, there is less officially disclosed about the company; you really end up relying on what you know about the SPAC owners and what the SPAC owners know about the company.
As with most startup ventures, most SPACs will probably go nowhere. If you end up landing the right one, however, it can pay off big.
Lordstown Motors popped 190% in the months following its SPAC merger with DiamondPeak Holdings last year. That stock now trades under the ticker RIDE.
On the flip side, you have Nikola Corp. (NASDAQ: NKLA), which lost over 76% of its price when it was discovered the company did not in fact have a ready product. This is a great example of when SPAC mergers can be somewhat uncertain.
Fortunately, IonQ has a product set for 2023. Leadership is solid as well.
So far, this this company has everything in place to compete with the biggest and best of its industry. That puts IonQ ahead of many SPACs and gives us good reason to be hot on the stock.
You can buy shares of dMY right now before the SPAC merger at $11 a share and see what happens. The ticker will eventually change to whatever the combined company wants it to be.
The combined company will be worth $2 billion.
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.